Debt Management

Debt management includes debt counselling, where an advertiser offers to give advice to a borrower about how to liquidate a debt due under a credit agreement,  and debt adjustment, where an advertiser offers to negotiate with a lender on behalf of the borrower the terms for discharging a debt. This includes, for example, debt management plans (DMPs) and individual voluntary arrangements (IVAs). Both debt counselling and adjustment are regulated by the FCA, and advertising is subject to the Conduct of Business Credit (CONC) rules in the FCA Handbook. These rules state, ‘In the light of the complexity of debt counselling, it is unlikely that media which provide restricted space for messages would be a suitable means of making financial promotions about debt solutions’ and includes a list of information that must be included in financial promotions for these services. In practice, this means that the advertising by most organisations offering debt management services on radio is not feasible.

It may be possible to approve scripts which are limited to the offer of debt counselling/debt advice, and which avoid having to include the full disclosures indicated in CONC 3.9, where there is no suggestion, express or implied, that debt adjustment/debt solutions are available. Such ads would require a reference to the availability of free debt advice from MoneyHelper.

Insolvency Practitioners providing debt management services are, however, exempt from the FCA rules. Radiocentre will approve advertising from organisations authorised by the Insolvency Practitioners Association (IPA), where the advertisement complies with the IPA’s Ethics Code and includes a standard tag to the effect: ‘May not be suitable for all and can affect credit rating. Free advice is available from MoneyHelper’.

Debt management does not include ‘debt consolidation’ services, where an advertiser offers a credit agreement as a means of reducing outgoings or the interest paid on a borrower’s existing credit arrangements. These arrangements are covered by the Consumer Credit Act.